Kemi Osukoya
January 5, 2021
GLOBAL ECONOMY
The global growth of 4 percent forecast rise in 2021 hinges on a year-round global successful COVID-19 vaccine rollout to populations as well as major investment boosts in countries as part of efforts to sustain the COVID-19 global economic recovery, according to a World Bank Group’s latest report.
“While the global economy appears to have entered a subdued recovery, policymakers face formidable challenges—in public health, debt management, budget policies, central banking and structural reforms—as they try to ensure that this still fragile global recovery gains traction and sets a foundation for robust growth,” World Bank Group President David Malpass said in a statement, speaking about the report.
The Bank’s report, Global Economic Prospects, published Tuesday said the global recovery from the current global health pandemic “will likely be subdued, unless policy makers move decisively to tame the pandemic and implement investment-enhancing reforms.”
The report further stated that even though the global economy has rebounded from its 4.3 percent shrinkage in 2020, helped by near-term policy priorities to control the spread of COVID-19, and vaccines developments, the pandemic has torpedoed the lives and livelihoods of millions of people around the world, leaving behind heavy death and illness tolls, populations plunged to extreme poverty and many governments in economic wreckages. As a result, there is potential for a long-term dip in economic activity and incomes, unless authorities accelerate a re-investment cycle aimed at sustainable growth that is less dependent on government debt.
Underscoring the forecast, Malpass said “to overcome the impacts of the pandemic and counter the investment headwind, there needs to be a major push to improve business environments, increase labor and product market flexibility, and strengthen transparency and governance.”
*This news has been updated to correct an error in the headline.
